The SME Programme
On July 23, 2004, the Financing Agreement was signed between MOET & MOI to execute the technical and financial sides of an EU funded Programme for the support of SMEs in Lebnonon.
The Integrated SME Support Programme is the first programme in Lebanon to take an integrated approach to improving the environment and support framework for SMEs. It is also the first programme to implement permanent support structures through which future programmes, initiatives and supports can be channelled.
The Program resulted in 4 key outcomes that are of great importance:
1. The establishment of an SME Support Unit at the Ministry:
· The SME unit became an effective part of the UNDP programme at the Ministry of Economy and Trade.
· The SME unit concentrated more of its work on conducting background studies, such as the two studies delivered by the programme that developed a list of indicators, and a methodology for calculating the score and a ranking for Lebanon as well. Moreover, and in order to have the input of relevant stakeholders, three workshops were conducted with relevant stakeholders in order to have valuable feedback and establish consensus regarding the importance of competitiveness in general and of having regularly updated competitiveness indicators
· An identifiable and credible public identity,
· Programme integrated with other programmes e.g. QUALEB, ELCIM, and
· International Monitoring Capability established
2. Development of SME Policy:
· New SME supporting legislation proposed, and
· A comprehensive support policy agreed
· Proposals sent to parliament
3. Support Strategy and Services for SMEs, Business Development Centers (BDCs):
· An integrated national support strategy and support schemes for SMEs developed,
· Establishment of three Business Development Centres,
· An effective scheme for improved entrepreneurship training developed,
· SME clients supported through incubation and national support schemes, and
· A network of professional service providers established to deliver support schemes.
4. Streamlining the Environment for SME Financing:
· Memorandum of Understanding agreed for the €4m Guarantee Fund administered by KAFALAT. In August 2008, and after accessing the success of the loan guarantee, the SME Unit amended the Memorandum of Understanding to provide up to 64 million euros in loan guarantees for small and medium-sized and start-ups.
· Innovative financing mechanisms proposed and set in motion with the private sector
· Projects guaranteed under Kafalat plus scheme, reached a total number of 312, and the total number of files issued under Kafalat Innovative scheme was 10 on April 2009. The number of loans by sector is distributed as follows: 66% industry sector, 9% Agriculture, 21% Tourism sector, 3 % Advanced Technologies, and 1 % Craft Industries. Furthermore, the distribution by region accounts for the largest share with 65 % of the loans for Mount-Lebanon, 13 % for Beirut, the shares of the South and Nabatieh are 4 % and 1 % respectively, 10 % for the North region and finally 7 % for the Bekaa region.
· The total number of jobs created based on employees working at companies financed by Kafalat “Plus and Innovative program” is estimated around 19,887. (Report by Kafalat August 2008)
Currently the SME Unit is working on:
- Attracting more funds to BDCs
- The legislative reform
- Improvements in the business environment in which all SMEs operate (this includes actions to stabilize the economy; a clearly enforceable legal framework; minimization of bureaucracy; creation of competitive market conditions for SMEs; and availability of appropriate human resources), which improves equality of opportunity for all enterprises.
- At the same time the SME Unit is trying to remove specific barriers to start-up, development or growth (this includes relevant measures to help individual SMEs in the areas of financing and tax relief’s; management development through training and consultancy; increased access to national and export markets; increased opportunities for procuring Government contracts; and increased access to information).
Check SME and Entrepreneurship Support Initiatives in Lebanon
For more information, please Click here to visit the SME website